The company’s combined ratio has seen significant improvement, standing at an impressive 82.4%. This marks a substantial leap from the underwriting loss of $17.2 million and a combined ratio of 101.6% reported during the same period last year.
In a notable financial turnaround, Fidelis’ net income available to common shareholders for the first 9 months of 2023 reached $1,904.2 million. This figure includes a substantial net gain of $1,639.1 million on the distribution of Fidelis MGU. Excluding this gain, the firm’s net income for the same period amounted to $265.1 million, a stark contrast to the net loss of $67.3 million reported in the corresponding period of 2022.
Fidelis reported a growth of 15.4% in gross premiums written for the first 9 months of 2023, reaching $2.8 billion. The net investment income also showed positive momentum, reaching $80.8 million, a significant increase from the $23.6 million recorded in the previous year.
Operating return on average common equity demonstrated a noteworthy rise to 13.3%, or 17.7% annualized, for the first 9 months of 2023. This is a stark improvement from the (2.1)% or (2.8)% annualized figure reported in 2022. The increase is attributed to substantial growth in both underwriting income and investment income.
Furthermore, Fidelis reported a decrease in catastrophe and large losses for the first 9 months, amounting to $139.8 million compared to $382.2 million in the same period last year. The firm explained that these losses were primarily related to wildfires in Hawaii and Cyclone Gabrielle in its Property Reinsurance line of business, as opposed to the previous year’s losses attributed to Hurricane Ian, European storms, and Australian floods.
Speaking about the figures, Dan Burrows, Group Chief Executive Officer, said: “I am pleased with another strong quarter for Fidelis which produced excellent results across multiple key metrics. We continue to deliver our strategy of generating superior underwriting returns with a year-to-date combined ratio of 82.4%.
“Our results demonstrate our ability to be nimble and opportunistic across our three pillars to react to market conditions and evidence the strength of the alignment with our partners at Fidelis MGU who are able to fully focus on underwriting activities.”
He continued, “During the year we looked to preserve underwriting integrity across the portfolio, and given the economic and geopolitical conditions, maximise the bottom line, delivering an annualised operating ROAE of 17.7%.
“We believe market duration is set to continue and there is still considerable opportunity within the portfolio following a number of years of compound increases across multiple lines of business.
“Our market-leading Specialty portfolio remains an important driver of growth within the business given strong prevailing market conditions, as evidenced by the strong year-to-date premium growth.
“We take a measured approach in Bespoke, where we continually assess market dynamics and evaluate opportunities based on the current risk environment. While this had led to a reduction in Bespoke premium year to date, we have a robust pipeline and are well-positioned to pursue long-term growth in this pillar.”
Burrows added, “As we approach the end of the year we remain focused on delivering value for our shareholders, optimizing our portfolio and targeting profitable underwriting opportunities in line with the Fidelis view of risk.”